Iat Buru Project

8/3/2019 Iat Buru Project

1/38

BUILDERS AND HOLDERS LIMITED COMPANY

TABLE OF CONTENT

Title page

Dedication

Acknowledgement

Executive summary

Chapter 1

Chapter 2

Chapter 3

Chapter 4

Chapter 5

DEDICATION

These Business plan research Project is dedicated tomy beloved parents Mr. and Mrs. Ngugi for their

financial support and moral which made this project a

success. My wife and Daughter for their support.


2/38


Above all, I thank the Almighty God for giving me

strength and good health to live each day at time

through out this entire period.

ACKNOWLEDGEMENT

I would like to acknowledge with sincere gratitude

the following people who assistance made this

project a success

To my classmate for their critism and

encouragement.

To my supervisor Mr.Phelix whose effort,

encouragement, knowledge and moral counsel form

the basis of this project.

To all these people, I am humbled by your assistance

and may God bless you abundantly

Executive summary

Builders and Holding Company (BNH) will be apartnership joint company with ten partners. Each

partner will contribute Kshs 2 million each to come

up with twenty million starting capital from their

saving or other sources. Then they will apply a long-


3/38


term bank loan of Kshs10 million from equity Bank

of Kenya. The vision of BNH will to best

construction and holding company in central and East

Africa in General. Mission will be to construct lower

and affordable houses by all sorts of clients.

BNH will be situated in Juja town found along Thika

road in Thika County. It will be approximately 30

kilometers from Nairobi central Business District.

Partners selected Thika county because it gotundeveloped Land and got a lot of clay soil for

Making bricks and tiles. The company Address will

be BUILDERS AND HOLDING COMPANY.P.O

BOX 25718-01000THIKA, TELPHONE NUMBER

254-20-3044211, EMAIL ADDRESS;INFO@BNH

AC.KE, and WEBSITE.WWW.BNH.CO.KE.It will

be managed by partners themselves whereby Mr.Patrick Thiong`o will be General Manager whom will

be contacted on his cell phone 0723564748.The

offices will be located strategically on the 2nd floor of

Juja plaza and be always be opened from 8am to 8

pm.

BNH will be operating under construction industry. It

will be constructing Residential houses and

apartments using bricks blocks and roof tiles. Then it

will construct a factory for brick production and tiles.


4/38


Three bedrooms residential house will cost Kshs 4.5

million and apartments will cost Kshs 2.5 million .It

will be registered by end of June 2015 and will then

obtain a permit /trading license from Thika city

Council later start operating on December same

year.BNH will be managed by seven partner, Patrick

Thiongo Managing Director, Susan njeri Finace,

Derric kinyua Marketing manager, Daniel kuria

Technical, James Wanyoike Human resource, Patrick

Njau Administration .The rest Three others will jointhe business later during expansion phase.


5/38


1. BUSINESS

DESCRIPTION

1.1 BUSINESS NAME

The name of the proposed venture will be

BUILDERS AND HOLDING COMPANY

LIMITED (BNH). It will be a joint partnership

business between seven people namely: PatrickThiong`o, Daniel kuria, Susan Njeri, James

wanyoike,Derrick kinyua,Samuel kageni , James

wathigo,Patrick Njau , Regina gathoni,and Henri

Mwangi the name builders and holding relate to


6/38


construction and selling of houses which our

customers will know what we are offering them. The

company will be able to construct modern houses

which will be affordable to our clients.

Vision and Mission

To build many bricks houses in unique and modern

way in Kenya and neighboring country. For five

years to have constructed over fifty houses in majorcities in central and east Africa. Our main aim will be

to see all sort of people either self employed or

employed could afford to purchase their own houses.

Our mission is to construct many houses at lower

rates which will be affordable by our customers. The

houses will be made out of bricks which are locked toeach other and dont need uses of cement and with

these we will build almost five hundred houses in a

month.

1.2 FORM OF OWNERSHIP

The legal form of ownership will be joint partnership.

The business will be registered by the end of June


7/38


2015 after applying for registration and permit from

Nairobi city council upon production of business

registration certificate.

Since the BNH will be partnership, it consults the

services of R.M Machache and Co. Advocates to

prepare a partnership deed that will detail the rights

and privileges of each of the partners, ratio of sharing

profit and losses, admission and exit of partners

among other things.Thereafter, BNH will be formallystarted in December 2015.

The total cost of starting the business will be Kshs 20

million which will be raised in the following manner;

each member will contribute two million each from

their personal savings or other sources. Partners will

then apply for along term loan amounting to Kshs tenmillion from Equity bank.

1.3 BUSINESS LOCATION AND ADDRESS

BNH will be situated in juja town along thika road

and the offices will be at juja plaza. Itsapproximately 30 kilometers from Nairobi central

business district. Partners selected juja because there

is a lot of clay soil for making bricks and tiles in the

area.furtermore the juja is low populated place with


8/38


approximates the population to be 500,000

inhabitants. Most land there is undeveloped and

cheap which will be suitable for our company to set a

factory and houses for sale. However, from the

market survey in June 2012 the partners realized that

70% of Nairobi residents dont own houses and

dream of owning one. With the completion of thika

super highway it will be easier to access CBD.The

address will be

BUILDERS AND HOLDING COMPANY

LIMITED (BNH)

P.O BOX, 13269-00100,

THIKA.

TELEPHONE 254-20-3044211, CELLPHONE

0716751428

EMAIL;[email protected]

WEBSITE; www.bnh.co.ke

1.4 PRODUCT AND SERVICES


9/38


BNH will be involved in construction of residential

our bricks will be designed to interlock in a way that

there is no need of cement to join them which will

make construction faster and houses cheaper for our

clients.

Houses and apartments using brick blocks. We will

create a factory for production of bricks where clay

soil is plenty in juja and some of the bricks will be

purchased from clay Works Company which will be10Kms away.

Almost 70% of people working in thika and Nairobi

dont own their houses so BNH will construct

cheaper houses affordable by middle classs and

lower income earners cost Kshs 4.5 million for three

bedrooms and an apartment Kshs 2.5 millions.Compared to others company three bedroom house

with a compound will selling same houses above

Kshs 7 million and these will help us in gaining the

larger market share.

1.5 JUSTIFICATION OF OPPURTUNITY

According to our research carried out by partners, it

indicated that the business goals will be archived.

There is big demand for affordable houses .The basic


10/38


reason we choose juja is because Nairobi is highly

populated and land is extremely expensive compared

to juja where most land is undeveloped and cheaper.

Still there is clay soil suitable for making bricks and

tiles.

In two years in operation we will be able to repay our

loan, debts considering is a new company with highly

profitable margins of 40% each year.

1.6 INDUSTRY

BNH will be operating under the construction

industry and will concentrate on modern houses and

high quality houses in the market .These industry

aims at decongesting Nairobi and developing other

towns in Kenya. The reason we choose these industryis to improve the living standards of Nairobi residents

and its environs. With new constitution and

introductions of countys most industry will be

located in other major towns like Thika which will

change the living of most residence in juja mostly.

2. MARKETING PLAN

2.1 CUSTOMER


11/38


BNH will serve all sorts of clients base ranging from

individuals to corporate organizations who are

willing to own their houses. Research market

conducted by BNH partners,it indicates that every

person working in Nairobi dreams of owning a house

mainly from 25-40 years of age and most of them

rent houses whose rent keeps rising. Further, 50% of

the customers will be employed and self employed

who work in companies mainly in the industrial area

and numerous companies located along MombassaRoad. Their main objective will be to acquire a home

before they retire that will help them work

effectively.

Majority of clients have joined saving and credit

groups which will facilitate them with loans at lower

interest rates so they will be able to purchase ourhouses. They will prefer houses at quiet and lower

populated areas so juja will be suitable for them

considering the thika sub highway transportation will

available, no traffic jam so accessing their working

places will be fast .Further more there is railway lines

which operates on daily basis from Nairobi to

juja.They will prefer be able to report between 7 am

and be home at 7 p.m daily. Considering Thika town

is next to juja town and has many industrial

companies so many clients can still access the town


12/38


All clients will be treated as special cases whereby

for those customer with their own designs will be

considered and BNH will work hard to meet their

demands after carefully scrutiny of their needs.

2.2 MARKET SHARE

JUJA has about 500,000 inhabitants according to the

central bureau of statistics(CBS)of the ministry of

planning .It has lowest population compared toNairobi province which has population of about 4

million people. Most of the people living there are

low earners coming from informal settlements of

Soweto, mukuru kayabamba south B slum villages

among others .It also comprises of middle earners in

komarock, umoja 1and 2, Don Holm etc.The market

research by the partners found that 80% of thepopulation were renting house and were willing to

purchase their own houses They have opted to save

and join saving groups purchase houses rather than

keep renting houses which they will never own them

in future. . BNH will offer the title deed for the

houses and apartments

Therefore the area has over 75% unexploited market

that is currently taken by 15% has taken by

hassconsult.The competitive advantage that BNH


13/38


will have will be its affordable rates on our houses

for both the lower and middle earners. The houses

will be strategically located for easy accessibility by

both working in town, thika town and other towns

nearby. Our main mission will be able to has capture

60% of market within one year in operation

2.3 COMPETITION

Most of competitors will be Has consult and Mugugacompanies which are located in Ruiru town next to

juja town whom are expanding their business along

the thika highway. According to research conducted

by partners indicates that they have in business for

six years now and they has been constructing houses

made of stone block from ruiru quarry .Their houses

are three bedroom residencies at cost of Kshs 7million whereby the production and extraction the

stone are very high ,mostly they rely from resident to

rent them spaces to quarry their stones which within

years to come they will ferrying raw materials from

others places making their houses to keep harking

which their construction will slower and expensive

then loosing customers to BNH .

They also suffer environmental regulations from

Neema since the mining of stones affect the residence


14/38


houses by cracking the walls due to impact of the

bombs used in mining .Their main competitive

advantages was that they have collaborated with

banks like housing finance whereby they offer

mortgages to client on their houses.

BHN will construct three bedrooms at cost of Kshs

4.5 million and introduce the construction of

apartments at cost of Kshs 2.5 million. The company

will collaborate with Equity bank to offer mortgagesto our clients to those whom prefer mortgages, then it

will negotiate with Delmont Company at thika town

to purchases houses for their managers at a special

rate.

However no other company has ever introduced the

brick houses in juja yet so it will extreme opportunityto introduce the system there and control the market

share and with time client will be able to know about

our product and difference from others companies

2.4 PRODUCTS

BNH houses will be made of bricks blocks and roof

tiles. We will manufacturing bricks and tiles so

construction will faster and compared to stone

blocks. The procedures and method are simple to


15/38


follow therefore it will less supervision and it fasten

the construction. Our houses will be red in color

same as bricks which will not need to be painted

outsides which will make them more unique from

other companies houses. Three bedrooms will cost

Kshs 4.5million and apartment for Kshs 2.5million.

2.5 MARKETING STRATEGIES

BNH intends to invest Kshs 500,000 in the initial 5months in advertising and promotional campaigns in

Juja area and its environs to get a slice of the 80%

market share. It will use the P`s (products, price,

place and promotions) of marketing in the following

manner.

Products

BNH house will be ever in their kind with high

quality and modern designs from Japan to meet our

clients needs. It will construct both residential

houses and apartments both cheaper and affordable

by sort of all customers.However; it will offer titledeeds for houses and apartments on completion of

purchasing houses. Our company will further give 20

first clients discount of 10% each and 7% to those

whom will pay cash.


16/38


Price

BNH will price it based on those whom will be

paying cash and time of occupation .The houses will

cost Kshs 4.5 million and apartment Kshs 2.5 million

and with research done by partners shows that BNH

will be able to offer our products on same price for

more fives in business without wondering

competition from other companies. The prices are

targeting all sorts of clients who are in position to payor be sponsored by their employers. Finally, BNH by

the help of marketing officers who will be in field

most times will monitor the competitors marketing

programmes and pricing and put measures in place to

counter them.

Place

BNH will be located strategically juja town along

busy thika road and our offices at juja plaza 1 km

from houses and factory. This location will provide a

good atmosphere for residential free from congestion

and noise. The place will be be accessed easilycourtesy of the on going upgrading of Thika highway

and its location whereby for those working in CBD

will not be affected by traffic jam since there will

direct route from Nairobi city centre via juja.


17/38


Promotion

BNH will mount a fierce marketing programme that

will be geared to popularizing the company and its

products. It will employ sales people on contracts

basis who will be working with the Marketing officer

to ensure that the products the promotion is done

throughout year, the group will physically visit all the

estate and location in whole juja area and pin posters

and distribute brochures. They will visit popularsocial places where we have gatherings e.g. market

places, churches and mosques and whore people

learning institution, then they will be participating on

tradeshows to markets our products and get feedback

from our clients.

BNH will run a supplement on its official launch inthe daily newspaper and put press advertisement once

in a week in the same newspapers and key ICT and

business magazines. The company will also advertise

in popular FM stations which are popular with the

city dwellers and more specifically the middle class

people .It will arrange a marathon along thika

highway to CBD after five month to market our

company and products and road shows on weekends

in juja town and its environs. Finally ,the company

will launch its own magazine which will be called


18/38


BNH magz` which will be published every month,

then it will erect a huge sign post along Muthaiga

roundabout along Thika highway to announce BNH

to all travelers coming to and from the Nairobi city.

3. ORGANISATION AND

MANAGEMENT PLAN

3.1 ORGANISATION STRUCTURE.

Managing Director

Mr. Patrick Thiong`o, 45, holds a Bachelor of

Science (Mechanical Engineering) from the

university of Nairobi. He had worked with BamburiCement Company as Plant senior manager for ten

years. He has extensive knowledge in plant and

production machines both mechanically and trouble

shooting them, configuring them. He also holds

professional certificates in Microsoft system

Engineer and currently working with East Africa Portcement as senior manager.


19/38


He will responsible in overseeing the production of

bricks and tiles in the company as well managing all

the constructions of houses and apartments.

Finance Manager

Ms Susan njeri 36 holds a master at bachelor

commerce from jomo Kenyatta University .She had

worked as assistance Permanent secretary in the

treasury in Kenya for four years. She is currentlyworking at Kenya Revenue as manager and among

people in Kenya vision 2030 in management of

funds. She will responsible in finance departments

and all company transaction.

Marketing manager

Mr. Derrick Kinyua 34 holds a Diploma in Marketing

and Sales from IAT institute. He had worked with

Brook Side Company as manager for seven years .He

also holds a certificate in European Business

Competence License (EBCL) in 2008, a business

courses taught at IAT.He is currently pursuing adegree in Entrepreneurships at Kenyatta University.

He will be business Marketing and sales Manager

with help of sales agents.


20/38


Technical Manager

Mr. Daniel kuria 46, Holds a Bachelor of Science

degree from Moi university .He has worked with

Safari COM for Four years managing and supporting

major computer networks. He has of worked with

Nest Technologies an Nairobi online company as

technical trainee .He also holds professional

certificates in Microsoft systems Engineer(MCSE)

and also Cisco certified NetworkAdministrator(CCNA).He is currently a Technical

Manager at YU mobile company .He will be

Technical Manager in the plant and Factory.

Human resources Manager

Mr. James Wanyoike 30 a diploma in Humanresources from Regional College and had worked

with Safari Park as human resource manager for three

years. He also holds professional certificates in

Microsoft system Engineer and Cisco certified

Network Administration .He is currently a resource

manager at Norfolk hotel Kampala and will beHuman resource manager

Architecture Manager


21/38


Mr. Henri Mwangi 29 holds a Bachelor of Science

(physics) degree from Japan University. He has five

years in designing, managing and supporting

Computers Networks. He had worked with Japan

Builders Company in Tanzania for six years and

currently manager in that company .He will senior

designer and architecture in BNH.

Administration Manager

Mr. Patrick Njau 33 holds Diploma in business

administration from College of Business studies in

Kampala, Uganda and had worked with Mayfair

Group of Hotels as an administrator for three years.

He also holds professional certificates in Microsoft

system Engineer and Cisco certified Network

Administration .He is currently a resource manager atNorfolk hotel Kampala and will be administration

manager.

The Rest of three Partners will join the business later

during its expansion phase.

3.2 STAFF LIST AND POSITIONS

BNH will employ fifty staffs, twenty brick ,four

administrator, four mechanics, three salesperson, two


22/38


office assistance, seven technical support offices,

four financial assistances, three watchmen, four

marketing assistance. The brick makers should has

qualified in a construction course and has Manson

certificate with five years experience with any

recognized construction companies in Kenya.

For marketing officers will have a diploma in

marketing and has working experience in any

company for four years. Salesmen will be wellspoken and has diploma in sales, talkative and four

years experiences in sales and will be paid with

commission.

Finance officers will be holding any degree in

Bachelor of education (Business studies and

economics).Has worked in any company in accountsdepartments with experience of five years. Office

assistance that has certificate in international

computer driving license from institute of advance

technology and certificate of secretarial, three years

experiences.

Administration officers will have diploma in business

management and has four years working experience,

Mechanics diploma in mechanical and experience of

three years.


23/38


3.3 BUSINESS REGISTRATION.

The legal form of ownership will be partnership .The

business will be registered by the end of June 2015

after applying to the general register upon which

BNH will then obtain a trading permit licenses from

Nairobi city council and thika city council and have

business registration certificate. The business will

then opened on December same year.

3.4 SUPPORT SERVICES

For enhanced business operations, BNH will various

support services and these will include banking with

Equity services .We will open both current accounts

and fixed accounts to help in business operations

whereby fixed one will be for further expansion ofcompany in future. Will apply for Kshs 10 million

long term loans for our starting capital .Then will

sign contracts with Equity for them to offer clients

mortgages for BNH houses and apartments.

3.5 LEGAL SERVICES

Since BNH is Partnership Company, it will consult

the services from R.M. Machache and advocates

located in Nairobi city centre opposite electricity


24/38


house to prepare a partnership deed that will detail

the rights and privileges of each of the partners, exit

of partners among other things.

Furthermore it will consult auditing services from

Water cooper Auditing Company for checking

business accounts and position of company.

4. OPERATIONAL FACILITIES

The following machines and equipment will be

acquired before the company starts its operations.


25/38


ITEMS QUANTITIES TOTAL

COST(KSHS)

Diesel

Generator

GB.C-200

2*(400,000) 800,000

Semi-

Automatic

production

Line machine

1*(2 million) 2,000,000

Lorries 4*(2 million) 8,000,000

Roof tile

making

machine

1*(600,000) 600,000

Burning tilesMachine

1*(1.5 million) 1,500,000

Computers 10*(25,000) 250,000

Laptops 5*(20,000) 100,000

Printers(Hp

1018)

3*(40,000) 120,000

Telephone

Landlines

6*(6000) 36,000

Office chairs 20*(1000) 20,000


26/38



27/38


BNH will acquire six spacious rooms of the second

floor of the juja plaza. Ten more offices will be

constructed in factory compound for each of the

seven departments and for ours products show room.

It will also purchase four acres of land for setting up

a factory and extraction of clay soil and creation ofback dams incase of water shortage for houses

construction

The computers and desks, chairs will be mostly used

in juja town offices. Computers will then be arranged

on their respective desks and installed with the

relevant software. The same will be done in the

General Managers, Finance officer, Administrativeoffices.

4.2 OPERATION STRATEGY

Offices opening hours will be 8a.m to 8p.m on

weekdays and 8a.m to noon on weekends and

holidays but for Marketing and salesmen offices will

be working 24/7in order to meet with our client and

to market ,promote products since government will

be introducing a 24 hrs economy.


28/38


Semi- Automatic production line with central control

for blocks making will perform the following tasks

1. Automatic scaling and batching

2. Automatic mixing

3. Automatic modeling and block producing

4. Pile stocking

5. Forklifting and transferring

Which will need ten people to operate and working

with it. Making of bricks will be done during the

since Machine will produce 600-15,000 pieces perday on eight working hours.

During the night workers will be burning up tiles and

bricks which will only need four people to control the

machines and lifting them to drying area.

BNH will provide houses for the staff working in the

plants and construction sites to avoid delay in

reporting work .Masonries will be working onconstruction sites from 7am to 5pm and two hours for

lunch break.

In the first year of the operation the business will

occur very minimal repair cost since most of the

facilities will be brand new

To ensure continuity of construction of the houses,

BNH will collaborates with Thika polytechnique for

students attachments for those whom will be doing

mason courses and will offering job for the best

students and certificates to others will not get chances


29/38


Below is table showing labour cost for the BNH

Employees

Designation

Numbers Salary

per

person

Kshs

Total Salary

per

Month(Kshs)

General

Manager

1 100,000 100,000

Finance

manager

1 80,000 80,000

Technical

Manager

2 60,000 120,000

Marketing

Manager

1 55,000 55,000

HumanResources

Manager

1 40,000 40,000

Architectural

manager

1 70,000 70,000

Sales Offices 4 20,000 80,000

Brick Makers 15 10,000 150,000

Fundis 20 20,000 400,000Marketing

offices

5 15,000 75,000

Office

assistances

3 10,000 30,000

Watchmens 4 6,000 24,000

TOTALCOST

1,124,000


30/38


Other expenses

Insurance 100,000

Maintainer and repair 50,000

Fuel 200,000

Electricity 150,000

Total (Kshs) 500,000


31/38


4.3 FACTORS LIKELY TO AFFECT BUSINESS

OPERATIONS

There are factors that will affect normal operations of

the business. Electricity will be vital for the business

to operate smoothly.BNH will therefore purchase

Diesel Generator and uninterruptible power supply

(Ups) for the computer.

Second factor will be fuel rationing and hirk whereby

it will be used in burning bricks and tiles .So it willinstall solar panel for power supply and reduce

Electricity power bills .Environmental regulations,

especially in the areas of fluorine emission .Fluorine

a by product of the brick making process, is highly

reactive element that is dangerous to human

brearthing.To loosen the danger posed by the gas

workers will be insisted to use scrubbers and mask ontheir faces.

Diversion of the main road that will joining factory

with Thika Highway by upgrading going on the

highway will force the company to create another

route to access the factory. Water will be another

problem since the resident in juja depends on

borehole waters so will make four boreholes and

three Dams to provide back up Waters.

Finally will be stiff competition from other

construction companies. To avoid these BNH will


32/38


retain lower prices and pay workers competitive

salaries to avoid mass exodus .While on the hand,

BNH will be affected internally by unfaithfulness,

Workers unrest, absenteeism and other human

relation problems. To curb this, the Human resource

Manager will handle individual workers well and will

be on the look out for any grumbling emerging and

this will be solved before it threatens the smooth

operation of the company.

5.0 FINANCIAL PLAN

5.1 CAPITAL STRUCTURE

BNH will require a start up capital of Kshs 30 million

.The money will be raise as follows: each of the tenpartners will contribute two million each from their

savings or other sources. This will bring in Kshs 20

million. Then the partners will apply for a long term

Loan of 10 million from Equity bank of Kenya.

5.2 PRE-OPERATIONAL COST

These are expenses, which the BNH will occur before

starting the business operation

ITEMS/ AMOUNT


33/38


ACTIVITIES Kshs

Machinery

And Equipment

13,486,000

Rent 120,000

Licenses and Permits 300,000

Electricity installation 500,000

Insurances 200,000

Advertisement 200,000

Total cost 14,806,000

5.3 OPENING BALANCE SHEET

Non-current assets

KshsPlant, property and

equipment 13,486,000

Current Assets

Cash at Bank16,514,000

30,000,000

KshsCapital

20,000,000

Current liabilitiesLoan from Bank

10,000,000

30,000,000


34/38


5.4 PROJECTED INCOME STATEMENT OF BNHAT THE END DECEMBER 2016


35/38


NOTES1

Opening Stock..115,000,000

Closing stock.27, 500,000

=Cost of good sold..87,500,000

ITEMS KSHS KSHS

Revenue 115,000,000

Less, cost of good

sold

Note1 87,500,000

Gross profit 27,500,000

Less expenses

1.Rent 1440000

2.Salaries 13,488,000

3.Insurane 1,200,000

4.Telephone 120,0005.Mantenane &

Repair

600,000

6.Electrcity 1,800,000

Less (18,528,000)

Net profit 8,972,000


36/38


5.5 BHN PROJECTED BALANCE SHEET FOR

THE YEAR ENDING 31ST DECEMBER 2016

Assets Amount

Kshs

Liabilities Amount

Kshs

Fixed Assets

Plant

Properties &

Equipment

CurrentAssets

Cash at

Bank

Closing

Stock

13,486,000

17,364,00027,500,000

54,986,000

Capital

Liabilities

Equity

+

Net Profit

Current

Liabilities

Creditors

Long term

Liabilities

Bank Loan

30,000,000

8,972,000

6,014,000

10,000,000

54,986,000


37/38



38/38


Documents

Iat Buru Project